BestSeller: 6 steps to win big deals in Singapore

How successful was your last big deal negotiation? Internationalisation of business and professional buying teams have led to demanding requirements on big deal management.

However, insights from Simon-Kucher & Partners reveal that 85% of sales professionals underestimate their power position, 80% do not properly use persuasion tactics, and 55% suffer from a lack of inner strength.

Overcoming these deficits on sales level is a major challenge for B2B companies. In particular, the construction & building materials industry in Singapore is under pressure.

With 3% growth in GDP (2014) the construction sector is within the top 3 growth industries, but it is slowing down compared to the previous years. Since project business is a key pillar in construction, sales teams need to follow six steps to win the next big deal:

1. Deal background: Do your homework
As a sales professional it is your ongoing responsibility to analyse the market and benchmark against your competitors. To prepare for a deal all relevant account data, e.g. sales history and customer complaints, needs to be at hand.

Companies in Singapore list RFQs and tenders for various public and private sector projects such as the upcoming MRT lines and the expansion of Changi Airport.

Every available information on the general process is valuable input for your deal approach. Investigating the counterpart’s buying centre will be especially worthwhile to understand the different stakeholders and their needs.

2. Balance of power: Evaluate your bargaining power
It’s the natural tendency to underestimate your own power and to overestimate the power of your counterpart. Therefore, it is important to understand your own position.

Does your product offer a high value to your customer? Are there product alternatives? Do customers perceive you as reliable and competent?

Answering these questions and balancing with the power position of the counterpart will help you to set objectives and prepare persuasion tactics accordingly. A good example how important it is to be aware of the own power position are Singaporean SMEs.

These companies typically underestimate their bargaining power. Even though, in 2014 they asserted themselves against competitors and won around 60% of government tenders in construction (contracts between S$50 million and S$100 million).

3. Negotiation preparation: Define objective and concessions
The more prepared you are, the higher your confidence in the negotiation. Sales professionals tend to spend too little time and effort on preparation. Senior executives invest on average just 43 minutes to prepare their key account negotiations.

Based on background information and balance of power you can set clear objectives, e.g. raise the unit price or increase the cross-selling share. This keeps further negotiation focused.

It may be necessary to make concessions to the counterpart during the negotiation. Identify points of interest for both parties and plan the concessions in advance. For each concession you admit, make sure to get something in return.

4. Target and walk-away prices: Set different price points
According to our recent pricing study 85% of companies in Asia-Pacific suffer from price pressure. A focus purely on a walk-away price tends to become self-fulfilling. Hence, skilled persuaders prepare several price points prior to the negotiation.

In the beginning a starting price has to be defined. This price signalises a price anchor and leaves some room for discounts which are often expected in Singapore.

In the course of negotiation a concession may have to be made leading to the target price. This target price should take into consideration past prices, deal objectives and bargaining position.

Finally, the walk-away price has to be determined. This price represents the lowest possible price for the deal and ensures a clear limit in the rush of a tough negotiation.

5. Negotiation tactics: Create a need at your counterpart
"The one who asks, leads." Questioning and challenging the current situation makes your counterpart acknowledge the importance of the issues you raise.

Once your customer realises the own need, persuade with the value of your product by emphasising the key strengths as well as the benefits for them. Your counterpart aims his/her own targets and will put forward several objections on product or price to weaken your bargaining position.

Be prepared to handle these tactics with counter questions or explanations. For example, by differentiating your offer, the buyer can then choose an option depending on the developed need.

The more resilient a customer relationship, the more responsible the negotiation will proceed.

6. Excellent salesforce: Train the sales team
Not all sales professionals perform equally well when they negotiate. It is important to identify the top negotiators with a high persuasion strength vs. the ones who are lacking behind.

This gives the chance to identify best practices and share knowledge to transfer their capabilities such as industry know-how, process competence, or communication skills to the others.

Sales teams often are inferior to buyers who undergo regular professional trainings. Hence, coaching the sales team with negotiation excellence skills and practicing with them through mock negotiations is essential to build confidence for a successful negotiation in big deals.